ASPS sees Thai equities recovering
According to Therdsak Thaveeteeratham, ASPS's executive vice-president, the government's forthcoming fiscal stimulus -- likely to follow the approval of the 2026 annual budget -- combined with anticipated policy rate cuts, could improve market sentiment. ASPS estimates that each 25-basis-point rate cut could lift the SET Index by around 70 points.
"The timing is now appropriate for a rate cut. Given the current economic conditions, we expect 1-2 policy rate reductions this year, each of which could act as a catalyst for the equity market," Mr Therdsak noted.
ASPS also sees additional upside from specific corporate catalysts. These include the anticipated mid-August relisting of Thai Airways International Plc (THAI) and a major strategic transaction by Siam Cement Group (SCC).
Both are expected to help push the SET's earnings per share (EPS) above 90 baht in 2025.
The broader economic environment also supports policy easing. Bond yields have declined, the baht has strengthened, and traditional growth drivers -- especially exports -- have weakened.
ASPS also cautioned that the risk of higher US import tariffs on Thai goods could further dampen export momentum in the latter half of 2025.
Key external risks to monitor include ongoing geopolitical tensions in the Middle East -- currently subdued -- and the Thai-Cambodian border dispute, which has de-escalated into a "social media war".
Domestically, political uncertainty is unlikely to obstruct passage of the 2026 budget, and markets appear to have already priced in much of the concern over potential US trade retaliation.
However, final clarity on US tariff rates for each country remains crucial. If Thailand ends up with a higher tariff burden than regional peers, it could slip into a technical recession, potentially triggering more aggressive fiscal and monetary responses.
Despite these concerns, ASPS believes export-related earnings risks are manageable. In the worst-case scenario, US tariffs would reduce total revenue for four key export sectors -- agriculture, food, petrochemicals and electronics -- by 3.1% and profits by only 1.1%.
According to ASPS, fears that the SET Index could plunge to a new low near 1,056 points have likely passed. Nonetheless, elevated tariffs could deter foreign direct investment.
"If Thailand remains at a 36% tariff rate while Vietnam and Indonesia are at 20% and 19%, respectively, we may lose competitiveness in attracting new investment. That said, there's still a sizeable pool of Board of Investment-approved projects in the pipeline, which should sustain investment activity for some time," Mr Therdsak added.
ASPS expects listed companies to post flat earnings on a quarterly basis in the second quarter of 2025, with total profits of around 262 billion baht.
For the full year, earnings are projected at 1.06 trillion baht, or 86 baht per share, representing 17% year-on-year growth. Sectors likely to show sustained third-quarter momentum include electronics, healthcare, property and transportation.
Investor sentiment is also improving. Thai listed companies have repurchased shares worth 24 billion baht year-to-date, matching the total recorded for the whole of 2024, signalling renewed corporate confidence.
Meanwhile, margin call pressures have eased, with margin loan balances declining to pre-Covid levels, suggesting reduced risk of forced selling.
Thailand's stock market has staged a strong rebound, delivering the best returns globally over the past month. This momentum increases the likelihood that MSCI and FTSE will raise Thailand's weighting in their August reviews -- potentially attracting further foreign inflows.
ASPS maintains a conservative year-end SET Index target of 1,376 points, based on an EPS estimate of 86 baht and a policy rate of 1.75%.
With the index currently trading in the 1,140–1,170 range, there is significant upside potential. The firm recommends a diversified investment strategy, with a focus on high-dividend-yield stocks across multiple sectors.
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